Print Friendly and PDF Print or Download

Healthcare Providers: 5 Reasons You May Need Individual Liability Coverage

As a healthcare professional, you and your assets may be at risk if named in a lawsuit. Being involved in a lawsuit may potentially impact your finances; damage your reputation and can be a very stressful situation.

If you provide healthcare services to patients or clients, you should have adequate individual insurance coverage in the event that you accidentally misdiagnose a patient, offer inappropriate advice, or are sued for another reason related to your professional services.

Healthcare professionals may be at risk of being sued by an injured patient or targeted by a disgruntled patient. To help if the unexpected occurs, consider securing individual liability insurance coverage.

Also called “malpractice insurance,” professional liability insurance can provide coverage for negligence, misrepresentation, and giving advice that leads to injury.

Medical malpractice, or professional liability, insurance may provide coverage for the following:
  • Defense attorney fees
  • Court costs
  • Medical damages
  • Settlement costs
  • Arbitration costs
  • Compensatory damages
  • Costs to defend your license if brought in front of the board

If you already have insurance through your employer, that is helpful.  However, your employer’s coverage may not be sufficient if you are named individually in a lawsuit. Moreover, your employer’s coverage may not serve to protect your personal reputation or assets.

Every professional healthcare provider should consider securing an individual insurance policy, rather than relying solely upon an employer for coverage.

Why Healthcare Providers Should Consider Securing Individual Coverage for Professional Liability Insurance

Here are five reasons individual professional liability insurance coverage is recommended if you work in healthcare. 
1. To Help Provide Coverage Against Lawsuits

Surgeons, physicians, and other medical doctors are not the only healthcare providers who may be sued. Other healthcare professionals, including physical therapists, pharmacists, and social workers are also members of the healthcare team and thus may be held responsible for their delivery of care. HPSO provides coverage to over 100 classes of business within the healthcare space.

If it is alleged that  you have deviated from the standard of care, made a mistake, offered improper advice, or provided an incorrect diagnosis, you may be sued. Professional liability insurance can help you against these types of errors (or perceived errors). You may not even have to make a mistake to be sued. It is common for individual healthcare providers to get sued for perceived negligence as well.
2. Your Employer’s Coverage is Limited

You may have insurance through your employer, but what if you are named individually in a lawsuit? You may be held responsible for a portion of the damages. Individual professional liability insurance helps provide legal representation, claim investigation, and other costs associated with defending a malpractice case on your own.

The liability insurance you receive from an employer may typically only cover allegations of malpractice. Even some of the best employer policies have coverage gaps. That is why you should read through your employer’s insurance policy to understand what it covers and what it excludes. 

The primary purpose of your employer’s policy is to help protect your employer. If there is a conflict of interest and you are relying on your employer’s policy, you may be required to pay out of pocket for legal fees and any potential judgments against you.

Additionally, your employer’s insurance policy will probably cover you only if you are working within the scope of your employment. If you give a friend or neighbor advice outside of the workplace, you will not be covered by your employer’s policy if you are sued based upon that advice. Without coverage through an individual policy, you may be on your own. 

Your employer’s coverage probably does not include license protection coverage, either. Therefore, for complaints to a professional licensure board, you will need attorney representation. 
You have the right to represent yourself in this situation, of course, but it is not preferable. It can be extremely expensive, time-consuming, and complex – even if you win.

Individual professional liability insurance may help cover you in these scenarios where your employer’s policy may not.
3. Part-Time Coverage

If you work full-time for an employer and also have a part-time job on the side, you may not have the necessary coverage in a lawsuit if you only have employer-provided insurance.

The HPSO policy does not exclude part-time exposures.
4. Cover Your Personal Assets 

If a judgment against you is unsatisfied (unpaid) in a court case, a plaintiff may go after your personal assets. For example, your wages may be seized in order to settle the debt. Your employer may also terminate you, and your credit could be damaged.

If you have assets coming to you in the future (i.e., an inheritance), they may be jeopardized in order to settle the judgment as well. Even if you do not have personal assets, your licensing board may consider your unsatisfied judgment as a form of professional misconduct.  As a result, your reputation and career may be harmed.
5. For Peace of Mind

Having individual professional liability insurance can help you perform your job with confidence. If you are sued in a medical malpractice claim, it can also help you worry less about your reputation or your financial assets being eliminated unexpectedly.

Types of Individual Liability Policies Available for Healthcare Workers

There are generally two basic types of medical malpractice insurance policies.
  • Occurrence based policy: Coverage for incidents (injury or loss) that occurred during an active policy period, regardless of when the claim is filed.
  • Claims Made policy: Coverage for claims filed while your policy period is active, regardless of when the incident occurred. 

Individual Liability Coverage for Healthcare Providers

If you work in healthcare – whether as a student or a professional – you should consider obtaining an individual professional liability insurance policy. When selecting a policy, consider working with a company specializing in insurance for healthcare professionals. 

With over 30 years of experience and providing coverage for more than 400,000 healthcare professionals, HPSO and its insurer partner, CNA, have the experience and expertise to assist policyholders through complex cases involving healthcare law. We work with counselors, physical therapists, dental hygienists, pharmacists, physician assistants, and many other allied healthcare professionals.

Get a quote for professional liability insurance today.
This publication is intended to inform Affinity Insurance Services, Inc., customers of potential liability in their practice. This information is provided for general informational purposes only and is not intended to provide individualized guidance. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy. Any references to non-Aon, AIS, NSO, HPSO websites are provided solely for convenience, and Aon, AIS, NSO and HPSO disclaims any responsibility with respect to such websites. This information is not intended to offer legal advice or to establish appropriate or acceptable standards of professional conduct. Readers should consult with a lawyer if they have specific concerns. Neither Affinity Insurance Services, Inc., HPSO, nor CNA assumes any liability for how this information is applied in practice or for the accuracy of this information.

Healthcare Providers Service Organization is a registered trade name of Affinity Insurance Services, Inc., a licensed producer in all states (TX 13695); (AR 100106022); in CA, MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services, Inc.; in CA, Aon Affinity Insurance Services, Inc., (CA 0G94493), Aon Direct Insurance Administrators and Berkely Insurance Agency and in NY, AIS Affinity Insurance Agency.